Italy forming new populist government today to challenge EU
Chaos and instability are more or less the normal state of affairs when it comes to Italy's national government. But the formation of a new government expected today, two months after voters handed more than 50% of the vote to two populist parties (Five Star and The League) promises more strife and uncertainty than usual. Now the European Union faces the probability of defiance by a major member-state.
Ishan Tharoor writes in the Washington Post:
[T]he populists' ascension in Rome crystallizes a real danger for Europe's liberal establishment. Their joint platform offers an emphatic riposte to the edicts of Brussels, potentially threatens the integrity of the euro zone, promises a hard-line campaign against migrants and extends a hand of friendship to Moscow.
Germany, the dominant economic power of the E.U., has been insisting on enforcement of quotas for member-states to accept immigrants, sparking resistance from four members admitted from the former Soviet sphere, called the Visegrad Group: the Czech Republic, Slovakia, Poland, and Hungary. Now a Western large economy, one of the founding members of the E.U., and one on the frontlines of immigrant intake, may defy the German-imposed mandate. The two parties in the populist coalition have:
... a plan to carry out mass deportations of illegal migrants [sic] and scale back Italy's efforts to rescue those attempting the perilous sea journey from North Africa. For Salvini and the League, it's simply part of their ultranationalist, far-right politics. But for the Five Star Movement, as di Maio told Today's WorldView last year, it serves as a wake-up call to the European Union, which they argue has not done enough to support Italy on migration.
Other plans of the populists, in the economic sphere, also spell trouble for the E.U., and probably for Italy, too:
Their proposed reforms include a guaranteed monthly income of close to $1,000 for poor families, tax cuts and a push against E.U.-mandated austerity measures. But it's not clear where the money for these programs will come from, and European officials fear that tens of billions of euros in additional spending could lead to a potentially catastrophic new sovereign debt crisis on the Mediterranean.
Financial markets are not amused, as the AP reports:
The prospect of a 5-Star-League government weighed heavily on markets and on Italy's European allies. The cost of borrowing to fund Italy's persistently high public debt rose to the highest levels in nine months and the Milan stock market was trading down 2 percent.
France's economics minister has already sounded an alarm that the eurozone's financial stability could be threatened if a populist government blows Italy's deficit commitments.
"If the new government takes the risk of not respecting its commitments on debt, the deficit, but also on consolidation of banks, then the entire financial stability of the eurozone will be threatened," Bruno Le Maire told the Cnews television channel Sunday.
There is no way that Italy can afford such generous handouts, and no matter the agenda of the new government, the money will not appear magically. I suspect that this means that immigration planks of their platform will be emphasized even more, leading to a well deserved crisis for the Brussels hegemons who impose demographic transformation on unwilling member-states.
All of this means further strife, and further chaos for the E.U., just as Brexit implementation becomes serious.
It couldn't happen to a more deserving group of autocrats.